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Stuart Company issued bonds with a $174,000 face value on January 1, Year 1. The bonds had a 8 percent stated rate of interest and
Stuart Company issued bonds with a $174,000 face value on January 1, Year 1. The bonds had a 8 percent stated rate of interest and a flve-year term. Interest is paid in cash annually, beginning December 31, Year 1. The bonds were issued at 101. The straight-line method is used for amortization. Requlred a. Use a financial statements model to demonstrate how (i) the January 1, Year 1, bond issue and (2) the December 31, Year 1, recognition of interest expense, including the amortization of the premium and the cash payment, affect the company's financial statements. Note: Use + for Increase or - for decrease. In the Statement of Cash Flows column, use the inltials OA to designate operating actlvity, IA for Investing activity, and FA for flnancing activity. Not all celis require input
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